Watchdog: Did sanctions on Iran snare U students with accounts at TCF Bank?

Amir Pouyan-Shiva, a University of Minnesota graduate student from Iran, is one of more than 20 Iranian students who received letters that their TCF Bank accounts were being closed, with no explanation. (Pioneer Press: John Autey)

Correction: TCF is not the only bank allowed on the U of M campus.

The day after Christmas, more than 20 Iranian students at the University of Minnesota found the opposite of holiday cheer in their mailboxes. The Watchdog was startled by the blunt five-sentence letter from TCF National Bank informing them the bank was closing their accounts.

Why?

The bank won't say. As far as the bewildered students can tell, it's because they're from Iran. The U's International Student and Scholar Services office said it knows of no other complaints about international student account closures now or in the past.

The United States has financial sanctions in place against Iran, which banks are obliged to follow and which can make transferring money tricky. But is that the reason for the broad action?

Amir-Pouyan Shiva, 33, who has been studying at the U for a doctorate degree in anthropology since 2008, got the letter. He told the Watchdog his dad in Iran sends him money to help out his family, but there's never been a problem before.

"Some of the students to whom I was talking, they said they didn't have any international transactions in their account," Shiva said. "In at least one case, the account wasn't active since spring 2011."

One new student tried Friday, Jan. 4, to open an account and was denied the minute the TCF banker saw his passport, Shiva said.

But TCF spokesman Jason Korstange told the Watchdog that the students' nationality had nothing to do with folding their accounts.

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Banks have to follow regulations that shut down accounts that appear to be connected with terrorist funding or money laundering, he said -- not that any of these students are necessarily accused of that.

"They need to supply us some additional information in order for us to continue on with their accounts," he said. The bank had not tried to get this information before sending out the letter, though.

TCF has a strong relationship with the U -- if not with all 67 of its Iranian students. Its logo is on every student's ID card, and the so-called "U Card Checking Account" is a TCF account. TCF has branch banks and ATMs all over campus. No wonder 30,000-plus students, faculty and staff have TCF accounts. The university receives $1 million in royalty payments per year from TCF, which the U uses for student activities and scholarships.

The Watchdog checked with Macalester College, which has a big international student population. Nobody there can remember a similar complaint about a bank, spokeswoman Barbara Laskin said.

After the ISSS and other U departments got calls from several worried and frightened students, the university's legal staff last week talked to TCF, which then agreed to assess each student's case individually, said ISSS assistant dean Barbara Kappler.

But on Monday, Jan. 7, when Shiva and his wife, Sima Sajjadiani, 30, who is also a U student, went to the bank, they were told to come back later.

On Tuesday, the National Iranian American Council issued a statement asking the bank to back off: "Even though there are significant financial sanctions against Iran, there is no law justifying the closure of bank accounts of Iranian students on the basis of their nationality."

A group of Iranian students plans to visit with a staffer at Rep. Keith Ellison's office Wednesday.

U.S. Treasury Department spokesman John Sullivan told the Watchdog that the Treasury and the State Department try to minimize unintended effects of sanctions against Iran.

"Our sanctions against Iran are on the Iranian government and its illicit activities. They're not focused on Iranian students who have reason to be studying" in the U.S., he said.

If TCF cuts off Shiva's account, what will he do?

"We have an account with another bank. My concern is that this will spread to other banks," he said. "We are not affiliated with any political personalities in Iran. We are people who are seeking freedom here."